By Karen Bernstein

With more than 1,200 biotechnology companies still extant, it's not always intuitively obvious which ones would be the best merger partners. Choices range from focusing on disease areas to technology to simply looking for companies with cash, and outside observers can rarely guess which companies will end up combining.

The three-way merger announced last week between Argus Pharmaceuticals Inc., Triplex Pharmaceutical Corp. and Oncologix Inc. was put together by ARGS, which chose to build a disease-based company focused on infectious diseases and cancer.

ARGS had been in separate discussions withTriplex and Oncologix, after talking to two or three dozen companies over the course of the last year, according to Chairman Martin Sutter, who is also general partner of The Woodlands/Essex Management Partners L.P. Sutter would have preferred to consolidate four or five companies, and will continue looking for opportunities.

Wanted: Partners

A key goal is to build a company with enough product and technology opportunities to attract a critical mass of corporate collaborations. "All biotech companies have varying